The Freelancing Frenzy: Behind the Boom of Independent Workers
Education and Careers Best-selling author of “The Future of Work,” Jacob Morgan, shares his futurist thinking on tomorrow’s workforce.
Mediaplanet: Throughout the most recent decades, freelancing has become more and more of an accepted career path. What do you think sparked this shift?
A few things happened here. The first is the idea of job security and long-term employment vanished. Pensions are virtually non-existent, the average employee tenure is just under five years, and for millennials it’s less than three years. The second is we have seen an amazing proliferation in freelancer marketplaces and ecosystems that support them. Sites like Elance-Odesk, Freelancer.com, Uber, TaskRabbit and many others make it very easy to become a freelancer. Niche marketplaces also exist for example UpCounsel is specifically geared toward legal professionals, HourlyNerd is for MBA’s from top rated schools, and 99Designs is specifically for design professionals. Freelancing has not only become an accepted career path, but it’s becoming more mainstream and this trend is not going to slow down.
MP: Can freelancing create a substantial enough living to make it a realistic, long-term plan for employees?
Being a freelancer is synonymous with starting a business or becoming an entrepreneur. This means that you not only have need to have certain skills, but you also need to learn about how to grow your brand and your business. Marketing, selling, contracts, invoicing, expenses, etc. are all things that freelancers must be familiar with when they get started. Of course as they grow their business they can hire other freelancers to get help in these areas. So can freelancers make enough to support themselves? Of course! But like in any entrepreneurial setting some will do better than others.
“Freelancing has not only become an accepted career path, but it’s becoming more mainstream and this trend is not going to slow down.”
I believe the recent report from Elance-Odesk said that the average hourly wage on their combined sites was right around $24 per hour, which is not bad. There are plenty of people that charge $70 per hour and of course there are some people that charge $5 per hour. It’s an open marketplace which is why it’s so important to learn about marketing, selling and building your brand. However, this only explores virtual freelancers, we also see a large and growing group of physical freelancers, for example, Uber drivers. On Uber the average hourly rate is $19 per hour.
MP: What are the employer benefits of utilizing freelancers?
There are many. Companies don’t have to pay for many of the overhead costs that they would need to dish out for employees such as office space, health care, training, or equipment such a computers and phones. Companies also have the ability to scale up or down quickly, within a few hours you can have highly qualified people working on things you need to get done. In an organization it can take weeks or months to allocate human resources from one area to another. Companies also get access to a global talent pool and are not limited by whom they can work with. Finally, companies get access to an on-demand workforce.
MP: What is the most important question to ask yourself if you’re considering making the jump?
Ultimately the question you are asking yourself is, “Can I and will I be successful as an entrepreneur or a business owner?” Again, you need to know about marketing, selling and the like.
MP: What is the most difficult element of a freelance lifestyle?
The biggest challenge for many freelancers is still being able to make a steady stream of income that allows them to live comfortably. The key word here being “steady.” Sure the flexible schedule and working on projects you care about factors are nice, but you need to be able to support yourself and in many cases a family. However, in today’s freelancer marketplace I think this is becoming easier to do, especially if a freelancer is able to augment virtual work with physical freelance work such as driving.
MP: Do you have any advice for those looking to become a freelancer themselves?
When I went off on my own I did so in gradual steps. I kept my full-time job and took on a few side-projects. Once I was able to pay my rent with the money I was making I started devoting more time to going off on my own. Always make sure you have a Plan B or in some case a Plan C. For me, the worst-case scenario was going to move back home with my parents in L.A., thankfully I never had to do that! Have some money saved and try to keep your overhead costs low. I think the decision to become a freelancer also depends on your lifestyle and the stage of life you are in. For younger people they are prone to take more risks for older people with families this may be a bit of a scary jump. Some of the decision is logical, but some of it is emotional.
Sources: EMSI’S Self-Employed Landscape; MBO Partners 2014 State of Independence Report; Intuit's 2020 Report Snapshot